TLG Canada Corp. v. Product Source International LLC, 2014 FC 924

This was an expungement proceeding for an order striking the registration for NIC OUT, a trademark for cigarette filters that remove tar and nicotine, held by the Respondent, Product Source International LLC (“Product Source”). Product Source brought an infringement action against the Applicant (“TLG Canada”) for selling “NIC-OUT” cigarette filters. TLG Canada argued that its Nic-Out product was distributed and sold in Canada as early as 2001, whereas Product Source (NIC OUT) alleged that it started using its product in 2003 (Registration of the NIC OUT mark was in 2008).

The Court held that the registration for NIC OUT should be struck from the Registry because it is invalid under section 18(1)(a) because it was not registrable on the date it was registered. It was found that it was confusing to the Nic-Out trademark and Product Source knew at the time of the application that: (1) the confusing mark NIC OUT was previously used in Canada, and (2) the trademark NIC OUT was not distinctive. Therefore, Product Source’s trademark NIC OUT was expunged from the Registry, and costs were awarded to TLG Canada in the amount of $10,000.